Council May Overturn Tipped-Employee Minimum Wage Vote
By September 13, 2018 0 194•
“Don’t worry. The council will overturn the vote,” Ward 2 Council member Jack Evans told The Georgetowner on Sept. 13. Evans was referring to Initiative 77, the so-called One Fair Wage DC initiative that would require all D.C. workers, including tipped employees, to receive “the same minimum wage directly from their employer as other employees by 2026.” That has generally been declared by proponents to be $15 an hour by 2020, but could be more by 2026.
D.C. voters approved the measure in the June 19 primary election by a margin of 56 to 44 percent. About 18 percent of the total electorate cast votes. But, overall, fewer than 10 percent of the D.C. electorate voted in favor of the initiative. There was strong opposition from restaurateurs and from many servers and bartenders themselves, who participated in a “Save Our Tips” campaign.
On July 10, a majority of Council members (7 of 13) co-introduced a bill to overturn Initiative 77. Mayor Muriel Bowser also came out against the vote’s outcome. That resolution will be taken up in an early agenda item at the first fall Council meeting on Monday, Sept. 17.
“Tipped workers do better in cities where they are paid the regular minimum wage, and the restaurant industry continues to thrive,” economic analyst David Cooper concluded in a 24-page report by the Raising America’s Pay initiative of the Economic Policy Institute, a D.C. think tank. The report focuses on the demographics of D.C.’s tipped employees and the impact of the guaranteed $15-an-hour wage regulations established in San Francisco and Seattle in the past two years. Cooper will present the report at the Sept. 17 Council meeting.
“Tipped workers in DC are majority people of color,” the EPI report concludes. Sixty-five percent of tipped workers work full time (although many work several part-time serving jobs). And although many tipped employees live in nearby Virginia and Maryland, “tipped workers are more likely than non-tipped workers to be DC residents.”
“Black tipped workers are paid 23 percent less per hour (in wages and tips) than white tipped workers,” according to the EPI report. “Women tipped workers are paid eight percent less per hour, and 20 percent less annually, in wages and tips than men tipped workers,” Cooper pointed out at a presentation in City Hall on Wednesday morning, Sept. 13.
Opponents of Initiative 77 argue that the District has a thriving hospitality industry in which many tipped employees make far more than the minimum wage — some into six figures. Also, in D.C., if tips do not bring the lower minimum wage for tipped employees up to the standard minimum wage, employers are required to make up the difference.
In addition, say opponents, D.C. isn’t comparable due to its proximity to tipped-wage states Virginia and Maryland, where some 40 percent of the workforce live and could choose to work if tips are jeopardized. It also lacks the profusion of chain restaurants, which are the focus of most of the national wage-abuse cases.
Most analysts agree that these initiatives cause businesses to increase prices or add a surcharge, or both, to cover their additional costs. But the study disputes that that has led to any significant reduced patronage for restaurants nor reduction in tips to servers in San Francisco or Seattle.
Congress could also get involved in repealing the initiative. Because of the city’s unique federal status, Congress has the power to overturn local laws and spending decisions. In the past, Republicans have blocked D.C. from allocating local funds for recreational marijuana, abortions for low-income women and a needle-exchange program designed to reduce the spread of HIV.
On July 11, Rep. Mark Meadows (R-North Carolina), leader of the House Freedom Caucus, and Rep. Gary Palmer (R-Alabama), proposed legislation in Congress that would block the District from spending money to implement the ballot measure.
“Congress should allow the local legislative process to play out,” Council Chairman Phil Mendelson said in July. Council members Jack Evans and Anita Bonds said they don’t want help from Congress to overturn Initiative 77.